Liquidating Trust Agreement

EXHIBIT 99.1


LIQUIDATING TRUST AGREEMENT


THIS LIQUIDATING TRUST AGREEMENT (the "AGREEMENT") is made in Champaign, Illinois, on December 31, 1998, between Cerion Technologies Inc. (the "COMPANY") and Richard A. Clark and John L. Patenaude (the "TRUSTEES") in order to establish the Cerion Technologies Liquidating Trust (the "TRUST").


WHEREAS, on December 29, 1998, at a special meeting (the "SPECIAL MEETING") of the shareholders of the Company's common stock, par value $0.01 per share (the "COMMON STOCK"), holders of a majority of the outstanding Common Stock voted to liquidate and dissolve the Company pursuant to a Plan of Complete Liquidation and Dissolution (the "PLAN");


WHEREAS, the Company has adopted the Plan and has fixed the close of business on the date hereof as the final record date for determining the record holders of the Company's Common Stock for the purposes of having the right to an interest in, and to be a beneficiary of, this Trust (the "SHAREHOLDERS");


WHEREAS, the Company believes it is in the best interest of the Shareholders to convey and transfer all of the Company's assets, including without limitation all real property, intellectual property and accounts receivable, debts and claims owing to the Company (the "Assets"), and further including the amounts expected to be needed to meet claims and contingent liabilities, which, in light of the indeterminate nature and amount of certain liabilities of the Company, the Board of Directors has determined should consist of all liquid and other assets of the Company as of the time of such conveyance, subject to reduction from time to time thereafter by the Trustees in their discretion as such liabilities are determined (the "CONTINGENCY RESERVE"), subject to all of the Company's liabilities to the extent of the value of the Assets (the "LIABILITIES") to the Trustees, or to their nominee for the benefit of this Trust, for the purpose of disposing of the Assets and distributing the net proceeds therefrom, if any, to the Shareholders.


NOW, THEREFORE, the parties hereto agree as follows:


1. PURPOSE. The primary purpose of this Agreement and of the appointment of the Trustees hereunder is to facilitate the liquidation of the Company pursuant to the Plan. Nothing contained herein shall be construed so as to constitute the Shareholders, or their successors in interest, members of an association, partnership or joint venture of any kind. Further, this Trust shall have no objective to continue or engage in the conduct of a trade or business.


2. ASSIGNMENT.


(a) The Company hereby grants, releases, assigns, transfers, conveys and delivers unto the Trustees all of the Company's right, title and interest in and to all Assets, subject to all Liabilities, together with the appurtenances and all the estate and rights of the Company in and to such assets, in trust for the uses and purposes stated hereinabove, subject to the terms and provisions set out below, and the Trustees hereby accept such Assets, Liabilities and such Trust, subject to the same terms


2


and conditions. Such conveyance shall be deemed to be a distribution under the Plan of property and assets by the company to the Shareholders.


(b) Incident to any liquidating distributions to be made by the Trustees, but not contingent on any such distribution, by virtue of the adoption of the Plan at the Special Meeting, each of the Shareholders, whether or not such Shareholder voted in favor of the Plan, shall automatically and conclusively be deemed to have conveyed and assigned to the Trustees or their nominee for the benefit of this Trust, such Shareholder's respective PRO RATA share of all Assets, subject to all Liabilities to the extent of the value of such Shareholder's respective PRO RATA share of the Assets.


3. TRANSFER OF INTERESTS OF BENEFICIARIES. A Shareholder's Beneficial Interest may not be transferred either by the Shareholder in person or by a duly authorized agent or attorney, or by the properly appointed legal representative of the Shareholder, nor may a Shareholder have authority or power to sell, assign, transfer, encumber or in any other manner anticipate or dispose of his Beneficial Interest; PROVIDED, HOWEVER, that a Shareholder's Beneficial Interest shall be assignable or transferable by will, intestate succession, or operation of law. The death or incapacity of any Shareholder shall not terminate this Agreement nor entitle the legal representatives of such Shareholder to claim an accounting or to take any action or proceedings in court for the distribution of the trust property or for a partition thereof, nor otherwise affect the rights and obligations of any of the Shareholders; PROVIDED, that the legal representatives of any deceased or incapable Shareholder shall succeed to the interest of such Shareholder. As used in this Agreement, "BENEFICIAL INTEREST" shall mean the proportionate share of each Shareholder in the Trust, determined (as of the date hereof) as the ratio of the number of issued and outstanding shares of Common Stock held by such Shareholder to the number of issued and outstanding shares of Common Stock held by all Shareholders.


4. TRUSTEES; FORMATION OF TRUST. The Company hereby appoints Richard A. Clark and John L. Patenaude, and their successors, as Trustees under this Agreement, and each of the Trustees, on behalf of himself and his successors, accepts such appointment. The Trust shall be conclusively deemed to have been created upon execution of this Agreement on behalf of the Company and by either of the aforesaid Trustees.


5. CONDITIONS OF TRUST. The Trustees hereby accept the Trust created by this Agreement and agree to execute the Agreement upon the terms and conditions hereof, including the following:


...